Vietnamese 2020 Industrialization Goals Unlikely
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In 2001, the National Congress of the Communist Party of Vietnam announced plans to accelerate industrialization and modernization. The goal was to bring the country into the fold of modern, industrialized nations by 2020. Unfortunately, this goal appears increasingly unattainable.
Slowing Economic Growth
In 2001, the National Congress of the Communist Party of Vietnam announced plans to accelerate industrialization and modernization. The goal was to bring the country into the fold of modern, industrialized nations by 2020. Unfortunately, this goal appears increasingly unattainable.
Slowing Economic Growth
Vietnam lags well behind other industrializing Asian nations like Malaysia and Thailand in terms of standards of living, technology, and infrastructure. While the nation’s progress toward its goal was slow for many years, the global economic crisis of 2010 brought it to a crawl. The percentage of growth in Vietnam’s GDP has lost several percentage points every year since the crisis, with overall growth now at 5.4 percent (down from 6.7 percent in 2011).
Vietnam’s per capita GDP was a mere $1,908 per year in 2013 (compared to $53,042 for the same year in the United States). Average incomes in Vietnam are among the lowest in Asia, only higher than Cambodia, Laos, and Myanmar. In order to reach a par level with other industrialized Asian nations would require decades for Vietnam at its current pace; much longer than other industrializing nations around the world.
Lack of Direction
Vietnam presents a unique case for industrialization, with atypical problems. One of the biggest is its lack of a defining industry. Other nations in Asia that have industrialized typically did so on the backs of targeted industries. For instance, South Korea had strong mechanical engineering, Japan had consumer electronics. Vietnam, however, has no such key industry, and this has made it difficult for the government to identify an appropriate place to funnel resources in order to best aid industrialization.
Although Vietnam has been striving towards industrialization since the 1990’s, it has seen little improvement in its science and technology. Most Vietnamese companies have done little to innovate, and today’s industrial production resembles how it was more than 20 years ago. Worse yet, this outdated technology is largely inefficient, costing Vietnamese manufacturers more each year in resources compared to other nations’ manufacturing processes. In fact, according to the 2014-2015 Global Competitiveness Report from the World Economic Forum, Vietnam ranks 99th out of 144 economies for technological readiness, and 118th in adopting the latest technologies.
Improvement Requires Change Government Unwilling to Make
Unfortunately, the government of Vietnam does not yet appear prepared to take the actions necessary to facilitate reaching its own targets for industrialization. Without initiatives targeted at encouraging businesses to invest in new technologies and programs to improve the nation’s infrastructure, growth will likely remain hobbled.
